General Atomics awarded $257M for Unmanned Aircraft System logistical support

Contract Overview

Contract Amount: $257,045,573 ($257.0M)

Contractor: General Atomics Aeronautical Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-06-29

End Date: 2022-12-28

Contract Duration: 1,278 days

Daily Burn Rate: $201.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: BASIC CONTRACT W58RGZ-19-C-0030 IS TO PROVIDE CONTRACT LOGISTICAL SERVICES (CLS) FOR THE WARRIOR A AND BLOCK 0 SYSTEMS REQUIREMENT WITHIN THE UNMANNED AIRCRAFT SYSTEM.

Place of Performance

Location: POWAY, SAN DIEGO County, CALIFORNIA, 92064

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $257.0 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC. for work described as: BASIC CONTRACT W58RGZ-19-C-0030 IS TO PROVIDE CONTRACT LOGISTICAL SERVICES (CLS) FOR THE WARRIOR A AND BLOCK 0 SYSTEMS REQUIREMENT WITHIN THE UNMANNED AIRCRAFT SYSTEM. Key points: 1. Contract provides critical logistical services for advanced unmanned aircraft systems. 2. Sole-source award raises questions about potential cost efficiencies and market alternatives. 3. Long contract duration (1278 days) suggests a need for sustained support. 4. Focus on Warrior A and Block 0 systems indicates specialized, high-value equipment. 5. Contracting agency is the Department of the Army, highlighting defense sector investment. 6. The contract's value places it among significant procurements within its domain.

Value Assessment

Rating: fair

The contract value of $257 million over approximately 3.5 years for logistical services for unmanned aircraft systems is substantial. Benchmarking this against similar contracts for CLS on advanced defense platforms is challenging without more specific service details. However, the 'cost plus fixed fee' structure can sometimes lead to higher overall costs if not tightly managed, as contractor incentives are geared towards cost recovery and a fixed profit margin rather than strict cost control. The lack of competition further complicates a direct value-for-money assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, General Atomics Aeronautical Systems, Inc., was considered. This typically occurs when a specific capability is unique to a single provider or when urgency and existing system knowledge necessitate it. The absence of a competitive bidding process limits the government's ability to explore alternative solutions or secure potentially lower pricing through market forces. This approach can be justified for highly specialized systems where only one contractor possesses the necessary expertise and intellectual property.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as the benefit of competitive pricing is forgone. It also reduces transparency in price discovery, making it harder to ascertain if the government is receiving the best possible value.

Public Impact

The primary beneficiaries are the U.S. Army's aviation and intelligence units relying on the Warrior A and Block 0 unmanned aircraft systems. Services delivered include essential logistical support, ensuring the operational readiness and effectiveness of these critical defense assets. The geographic impact is likely concentrated around military bases and operational theaters where these unmanned systems are deployed. Workforce implications may include specialized technical and logistical personnel employed by the contractor to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially impacting cost-effectiveness.
Cost-plus-fixed-fee contract type may incentivize higher spending if not rigorously overseen.
Long-term nature of the contract requires sustained monitoring for performance and cost control.
Lack of detailed public information on specific services provided hinders granular value assessment.

Positive Signals

General Atomics is a recognized leader in unmanned aircraft systems, suggesting specialized expertise.
Contract addresses critical logistical needs for advanced defense technology, supporting national security objectives.
The definitive contract structure provides a clear framework for service delivery and payment.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on unmanned aerial systems (UAS) and their associated support. The market for UAS is rapidly growing, driven by military and civilian applications. General Atomics is a major player in this space, particularly known for its Predator and Reaper series. Spending on UAS logistics is a critical component of overall defense procurement, ensuring the operational readiness of these increasingly vital platforms. Comparable spending benchmarks would typically involve other large-scale sustainment contracts for complex military hardware.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. General Atomics Aeronautical Systems, Inc. is a large defense contractor. There is no explicit information regarding subcontracting plans for small businesses within the provided data. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem for this particular contract is unclear, though large prime contracts often involve some level of subcontracting across various tiers.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Army contracting and program management offices. As a definitive contract, it establishes specific terms and conditions for performance and payment. Accountability measures are embedded within the contract's clauses regarding delivery schedules, quality standards, and cost reporting. Transparency is limited due to the sole-source nature and the proprietary aspects of defense logistics, but contract awards and basic details are typically reported in federal procurement databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Unmanned Aircraft Systems Procurement
Aviation Logistics Support
Defense Contractor Services
Department of the Army Contracts
Aerospace Manufacturing Support

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Lack of competitive bidding
Potential for cost overruns
Dependence on a single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $257.0 million to GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC.. BASIC CONTRACT W58RGZ-19-C-0030 IS TO PROVIDE CONTRACT LOGISTICAL SERVICES (CLS) FOR THE WARRIOR A AND BLOCK 0 SYSTEMS REQUIREMENT WITHIN THE UNMANNED AIRCRAFT SYSTEM.

Who is the contractor on this award?

The obligated recipient is GENERAL ATOMICS AERONAUTICAL SYSTEMS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $257.0 million.

What is the period of performance?

Start: 2019-06-29. End: 2022-12-28.

What is the specific breakdown of logistical services provided under this contract?

The provided data indicates the contract is for 'Contract Logistical Services (CLS) for the Warrior A and Block 0 Systems Requirement within the Unmanned Aircraft System.' However, the specific breakdown of these services is not detailed. CLS typically encompasses a wide range of activities, including maintenance, repair, overhaul, supply chain management, inventory control, technical support, training, and sometimes even operational support for the unmanned aircraft systems. For the Warrior A and Block 0 systems, these services would be tailored to the unique requirements of these specific platforms, which are likely advanced intelligence, surveillance, and reconnaissance (ISR) or combat-capable drones. A more granular understanding would require access to the contract's statement of work (SOW).

How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for similar services?

The Cost-Plus-Fixed-Fee (CPFF) structure is common in defense contracting, particularly for research, development, and complex services where the scope may evolve or is not fully defined at the outset. In a CPFF contract, the contractor is reimbursed for allowable costs incurred, plus a fixed fee representing profit. This differs from fixed-price contracts, where the price is set regardless of costs, incentivizing efficiency but carrying higher risk for the contractor if costs escalate. It also differs from cost-plus-incentive-fee (CPIF) contracts, which share cost savings or overruns between the government and contractor. For logistical services, CPFF can be advantageous when the exact volume of work or specific maintenance needs are unpredictable. However, it places a greater burden on the government to meticulously audit costs and ensure they are reasonable and allocable, as the contractor's primary incentive is to cover costs and earn the fixed fee, rather than minimize expenses.

What is General Atomics Aeronautical Systems, Inc.'s track record with the Department of the Army and similar contracts?

General Atomics Aeronautical Systems, Inc. (GA-ASI) has a well-established and extensive track record with the Department of Defense, including the Department of the Army, primarily as a leading developer and manufacturer of unmanned aircraft systems (UAS). They are renowned for platforms like the Predator and Reaper series. GA-ASI has historically secured numerous large contracts for the production, sustainment, and logistical support of these systems. Their experience with complex UAS platforms suggests a deep understanding of the technical and logistical requirements involved. Past performance reviews and contract histories available through federal procurement databases would provide more specific details on their performance, including on-time delivery, quality, and cost control on previous Army contracts, particularly those involving logistical services for UAS.

What are the potential risks associated with a sole-source award for critical logistical support?

A sole-source award for critical logistical support, like that for the Warrior A and Block 0 UAS, carries several potential risks. Firstly, the absence of competition can lead to higher prices than might be achieved in a competitive environment, as the contractor faces less pressure to offer the most cost-effective solution. Secondly, it can reduce innovation, as there is no external market pressure to develop new or improved support methods. Thirdly, it creates vendor lock-in; the government becomes highly dependent on a single supplier, making it difficult and costly to switch providers even if performance issues arise. Finally, without competitive benchmarking, it can be challenging for the government to accurately assess whether the pricing and service levels represent fair market value. This necessitates robust government oversight and negotiation to mitigate these risks.

How does this contract's value compare to overall U.S. Army spending on unmanned aircraft systems?

The $257 million awarded to General Atomics for logistical services represents a significant investment in the sustainment of specific unmanned aircraft systems (UAS). While this figure is substantial for a single contract, it needs to be viewed within the broader context of the U.S. Army's overall UAS program spending. The Army operates a diverse portfolio of UAS, ranging from small tactical drones to large, high-altitude, long-endurance platforms. Total annual spending on UAS procurement, research, development, and sustainment can run into billions of dollars. Therefore, this $257 million contract, while large, is likely one component of a much larger budgetary allocation dedicated to maintaining and operating the Army's extensive UAS fleet. Its proportion relative to total Army UAS spending would depend on the specific systems (Warrior A, Block 0) and their operational tempo and lifecycle stage.

What are the implications of the contract end date (December 28, 2022) given the start date (June 29, 2019)?

The contract duration spans approximately 3 years and 6 months (from June 29, 2019, to December 28, 2022). This timeframe suggests a need for sustained, long-term logistical support for the Warrior A and Block 0 unmanned aircraft systems. The fact that the contract has concluded (based on the end date) implies that either the required services have been completed, the systems have been transitioned to a new support contract, or the systems themselves are being phased out or replaced. For logistical services, a multi-year duration is typical for complex military equipment to ensure operational readiness. The end date is crucial for planning future sustainment strategies and ensuring there is no gap in critical support for ongoing military operations that rely on these UAS.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: HARDWARE AND ABRASIVES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W58RGZ17R0218

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 14200 KIRKHAM WAY, POWAY, CA, 92064

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $473,281,951

Exercised Options: $257,045,573

Current Obligation: $257,045,573

Subaward Activity

Number of Subawards: 34

Total Subaward Amount: $15,738,129

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline